Medicare’s unexpected beneficiaries

David Gura Nov 2, 2012

Medicare’s unexpected beneficiaries

David Gura Nov 2, 2012

When you think of Medicare’s beneficiaries, you probably think of senior citizens. They account for more than 80 percent of the 49 million Americans on Medicare. Medicare beneficiaries also include younger Americans with disabilities and terminal kidney disease. 

But Medicare has helped millions of other Americans: the children and grandchildren of elderly parents. 

Every morning, Jeff Gordon takes his dad, Albert, to an adult daycare center in Washington called Iona Senior Services. The staff calls Albert, who is 101 years old, “Mister G.”

Four years ago Jeff Gordon moved his dad here, from Detroit, to live with him and his wife. Albert — like anyone who has lived a century — sees a lot of doctors: an internist, a cardiologist, a dermatologist, an ear-nose-and-throat specialist, and a podiatrist.  And then, there is the occasional unplanned visit. 

All that medical care is expensive. According to Jeff Gordon, the bills from this year alone are at least $18,000.

“It’s outrageous,” he says. “I mean, just to have a podiatrist to clip his nails, that’s $150.  And if he goes into the hospital, you’re talking $5,000, $6,000, $10,000, just for a visit, to find out what happened.”

Jeff’s Gordon’s mother-in-law is 93, and she also lives with him. Last year, doctors discovered she had a tumor, so she had to spend 10 days in intensive care, then another week and a half in the hospital.

“That bill must have been $100,000,” he remembers. “And I don’t care how much money you save for retirement. $100,000 goes pretty fast in the health care system.”

Jeff says Medicare has made it possible for him to care for her and his dad, whose annual income from Social Security is just over $16,000. 

“If he wasn’t on Medicare and we had to cover all these costs out of pocket, not only would it bankrupt him, but it would probably bankrupt us as well.”

Medicare’s architects had that in mind when they came up with the program. 

“Medicare was designed as an intergenerational program, to help retirees, but also to help their children by sparing them from the costs and the burden of paying for their parents’ medical care,” Jonathan Oberlander says. He’s a professor of public health at the University of North Carolina at Chapel Hill.

Democratic Congressman John Dingell helped vote Medicare into law in 1965, and he remembers what elderly care used to be like, in the days before Medicare: “Well, it was pretty grim. Senior citizens were depending either on charity or on their kids in most instances.”

Back then, insurers wouldn’t offer coverage to seniors because they were seen as too high a risk. According to David Rosner, a public health professor at Columbia University, when it came to paying for an aging parent’s medical care, children faced a tough choice.

“It was going to either come out directly of your pocket, or alternatively, you were going to have to abandon your mom and pop,” he says.

It is hard to quantify how much Medicare has helped people like Jeff Gordon, who care for older parents.

Health care economist Marilyn Moon says it helps to think about how much it would cost for an elderly person to buy health insurance on the open market. That would be around $10,000 or $11,000 per year, she estimates.That’s maybe five times what a healthy, middle-aged American pays.

“So that means that, if you were a family trying to help out your mother or your grandmother, that would be a substantial chunk of resources,” Moon says.

Last year Medicare spent nearly $400 billion to provide health care for seniors. That also represents nearly $400 billion in savings that seniors and their families could use to spend on other things.

The typical senior lives on about $22,000 a year, and Oberlander says that’s why most Americans see Medicare as essential.

“The fact that the government is there, that we as a society are there, to pool together and pay for them together as a community is a tremendous help to families — because those younger families, were it not for Medicare, they would be the ones who would be left holding the bills,” he says.

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